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EXHIBIT 10(d)
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as amended, restated, supplemented, or
otherwise modified, the "Pledge Agreement"), dated as of August 26, 1998, is
made by RARE HOSPITALITY INTERNATIONAL, INC., a corporation organized under the
laws of the state of Georgia (the "Pledgor"), in favor of FIRST UNION NATIONAL
BANK, a national banking association, as Administrative Agent (the
"Administrative Agent"), for the ratable benefit of itself and the financial
institutions (the "Lenders") that are, or may from time to time become, parties
to the Credit Agreement referred to below.
STATEMENT OF PURPOSE
Pursuant to the terms of the Amended and Restated Credit Agreement
dated the date hereof (as amended, restated, supplemented or otherwise
modified, the "Credit Agreement") by and among the Pledgor, as borrower, the
Lenders who are or may become party thereto, the Administrative Agent and
BankBoston, N.A. and Fleet National Bank, as Co-Agents, the Lenders have agreed
to make certain Extensions of Credit to the Pledgor as more particularly
described therein.
The Pledgor is the legal and beneficial owner of (a) the shares of
Pledged Stock (as hereinafter defined) issued by certain corporations as
specified on Schedule I attached hereto and incorporated herein by reference
(collectively, the "Issuers") and (b) the Partnership/LLC Interests (as
hereinafter defined) in the partnerships and limited liability companies listed
on Schedule I hereto (collectively, the "Partnerships/LLCs").
In connection with the transactions contemplated by the Credit
Agreement and as a condition precedent thereto, the Lenders have requested, and
the Pledgor has agreed to execute and deliver this Pledge Agreement together
with the Pledged Stock to the Administrative Agent, for the ratable benefit of
itself and the Lenders.
NOW, THEREFORE, in consideration of the foregoing premises and to
induce the Administrative Agent and the Lenders to enter into and make
available Extensions of Credit pursuant to the Credit Agreement, the Pledgor
hereby agrees with the Administrative Agent, for the ratable benefit of itself
and the Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms which
are defined in the Credit Agreement and used herein are so used as so defined,
and the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code as in effect in the
State of North Carolina; provided that if by reason of mandatory
provisions of law, the
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perfection or the effect of perfection or non-perfection of the
security interests in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than North
Carolina, "Code" means the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating
to such perfection or effect of perfection or non-perfection.
"Collateral" means the Stock Collateral and the
Partnership/LLC Collateral.
"Obligations" means the Pledgor's obligations under the
Credit Agreement, and each Loan Document to which such Pledgor is a
party.
"Partnership/LLC Collateral" means all of the Partnership/LLC
Interests of the Pledgor in the Partnerships/LLCs and all Proceeds
therefrom.
"Partnership/LLC Interests" means the entire partnership or
membership interest of the Pledgor in each Partnership/LLC listed on
Schedule I hereto, including, without limitation, the Pledgor's
capital account, its interest as a partner or member in the net cash
flow, net profit and net loss, and items of income, gain, loss,
deduction and credit of the Partnerships/LLCs, its interest in all
distributions made or to be made by the Partnerships/LLCs to the
Pledgor and all of the other economic rights, titles and interests of
the Pledgor as a partner or member of the Partnerships/LLCs, whether
set forth in the partnership agreement or membership agreement of the
Partnerships/LLCs, by separate agreement or otherwise.
"Pledge Agreement" means this Pledge Agreement, as amended,
restated, supplemented or otherwise modified from time to time.
"Pledged Stock" means the shares of capital stock of each
Issuer listed on Schedule I hereto, together with all stock
certificates, options or rights of any nature whatsoever that may be
issued or granted by such Issuer to the Pledgor while this Pledge
Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Code on the date hereof and, in any event,
shall include, without limitation, all dividends or other income from
the Pledged Stock and the Partnership/LLC Interests, collections
thereon, proceeds of sale thereof or distributions with respect
thereto.
"Stock Collateral" means the Pledged Stock and all Proceeds
therefrom.
2. Pledge and Grant of Security Interest. The Pledgor hereby
delivers to the Administrative Agent, for the ratable benefit of itself and the
Lenders, all the Pledged Stock and hereby grants to the Administrative Agent,
for the ratable benefit of itself and the Lenders, a first priority security
interest in the Pledged Stock and all other Collateral, as collateral security
for the
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prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.
3. Stock Powers; Register of Pledge. Concurrently with the
delivery to the Administrative Agent of each certificate representing one or
more shares of Pledged Stock, the Pledgor shall deliver an undated stock power
covering such certificate, duly executed in blank by the Pledgor with, if the
Administrative Agent so requests, signature guaranteed.
4. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Pledgor shall remain liable to perform all of its
duties and obligations as a partner or member of the Partnerships/LLCs to the
same extent as if this Pledge Agreement had not been executed, (b) the exercise
by the Administrative Agent or any Lender of any of its rights hereunder shall
not release the Pledgor from any of its duties or obligations as a partner or
member of the Partnerships/LLCs, and (c) neither the Administrative Agent nor
any Lender shall have any obligation or liability as a partner or member of the
Partnerships/LLCs by reason of this Pledge Agreement.
5. Representations and Warranties. To induce the Administrative
Agent and the Lenders to execute the Credit Agreement and make any Extensions
of Credit and to accept the security contemplated hereby, the Pledgor hereby
makes to the Administrative Agent and the Lenders all of the representations
and warranties made by the Pledgor in the Credit Agreement and the other Loan
Documents, as if the same was set forth herein in full and additionally
represents and warrants that:
(a) as of the Closing Date, the shares of Pledged Stock
listed on Schedule I constitute all of the issued and outstanding
shares of all classes of the capital stock of each Issuer;
(b) all the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable;
(c) as of the Closing Date, the Pledgor is the record
and beneficial owner of, and has good and marketable title to, the
Pledged Stock listed on Schedule I, free of any and all Liens or
options in favor of, or claims of, any other Person, except the Lien
created by this Pledge Agreement and the Liens permitted under Section
10.3 of the Credit Agreement; and
(d) upon delivery to the Administrative Agent of the
stock certificates evidencing the Pledged Stock, the Lien granted
pursuant to this Pledge Agreement will constitute a valid, perfected
first priority Lien on the Collateral, enforceable as such against all
creditors of the Pledgor and any Persons purporting to purchase any of
the Collateral from the Pledgor.
6. Certain Covenants. The Pledgor covenants and agrees with the
Administrative Agent, for the ratable benefit of itself and the Lenders, that,
from and after the date of this Pledge Agreement until the Obligations are paid
in full and the Commitments are terminated:
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(a) The Pledgor agrees that as a partner or member in
the Partnerships/LLCs it will abide by, perform and discharge each and
every obligation, covenant and agreement to be abided by, performed or
discharged by the Pledgor under the terms of the partnership
agreements and operating agreements, as applicable, of the
Partnerships/LLCs, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, at no cost
or expense to the Administrative Agent and the Lenders.
(b) If the Pledgor shall, as a result of its ownership
of the Collateral, become entitled to receive or shall receive any
stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), whether in addition to,
in substitution of, as a conversion of, or in exchange for any of the
Collateral, or otherwise in respect thereof, the Pledgor shall accept
the same as the agent of the Administrative Agent, hold the same in
trust for the Administrative Agent and deliver the same forthwith to
the Administrative Agent in the exact form received, duly indorsed by
the Pledgor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank
by the Pledgor, to be held by the Administrative Agent, subject to the
terms hereof, as additional collateral security for the Obligations.
Further, if the Pledgor shall, as a result of its ownership of the
Collateral, become entitled to receive or shall receive any options or
rights, whether in addition to, in substitution of, as a conversion
of, or in exchange for any of the Collateral, or otherwise in respect
thereof, the Pledgor shall assign such options or rights as the case
may be to the Administrative Agent, to be held by the Administrative
Agent, subject to the terms hereof, as additional collateral security
for the Obligations. In addition, any sums paid upon or in respect of
the Collateral upon the liquidation or dissolution of any Issuer or
Partnership/LLC shall be held by the Administrative Agent as
additional collateral security for the Obligations.
(c) Without the prior written consent of the
Administrative Agent, the Pledgor will not (i) vote to enable, or take
any other action to permit, any Issuer or Partnership/LLC to issue any
stock, partnership interests, limited liability company interests or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any
stock, partnership interests, limited liability company interests or
other equity securities of any nature of such Issuer or
Partnership/LLC except stock, partnership interests, limited liability
company interests or other securities issued to the Pledgor and
pledged to the Administrative Agent pursuant to the terms of this
Pledge Agreement, (ii) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, or
(iii) create, incur or permit to exist any Lien or option in favor of,
or any claim of any Person with respect to, any of the Collateral, or
any interest therein, except for the Lien provided for by this Pledge
Agreement and Liens permitted under Section 10.3 of the Credit
Agreement. The Pledgor will defend the right, title and interest of
the Administrative Agent in and to the Collateral against the claims
and demands of all Persons whomsoever.
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(d) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and
of the rights and powers herein granted. If any amount payable under
or in connection with any of the Collateral shall be or become
evidenced by any promissory note, other instrument or chattel paper,
such note, instrument or chattel paper shall be immediately delivered
to the Administrative Agent, duly endorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this
Pledge Agreement.
(e) The Pledgor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other similar taxes which may be
payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions contemplated
by this Pledge Agreement.
(f) Within ten (10) Business Days following the
formation or acquisition of any Material Subsidiary of the Pledgor,
the Pledgor agrees to execute a new pledge agreement or a supplement
to this Pledge Agreement, as applicable, and such other documents and
instruments as required pursuant to Section 8.12 of the Credit
Agreement.
7. Cash Dividends and Distributions; Voting Rights. Unless an
Event of Default shall have occurred and be continuing and the Administrative
Agent shall have given notice to the Pledgor of the Administrative Agent's
intent to exercise its rights pursuant to Paragraph 8 below, the Pledgor shall
be permitted to receive all cash dividends and shareholder, partnership and
membership distributions paid in accordance with the terms of the Credit
Agreement in respect of the Collateral and to exercise all voting and
corporate, partnership or membership rights, as applicable, with respect to the
Collateral; provided, that no vote shall be cast or corporate, partnership or
membership right exercised or other action taken which would impair in any
material respect the Collateral or which would result in any violation of any
provision of the Credit Agreement, the Notes, this Pledge Agreement or any
other Loan Document.
8. Rights of the Administrative Agent.
(a) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the Pledgor, (i) the Administrative Agent shall have the right to receive any
and all cash dividends paid in respect of the Pledged Stock and partnership and
membership distributions in respect of the Partnership/LLC Interests and make
application thereof to the Obligations in the order set forth in Section 4.5 of
the Credit Agreement and (ii) all shares of the Pledged Stock and the
Partnership/LLC Interests shall be registered in the name of the Administrative
Agent or its nominee, and the Administrative Agent or its nominee may
thereafter exercise (A) all voting, corporate, partnership, membership and
other rights pertaining to such shares of the Pledged Stock or Partnership/LLC
Interests at any meeting of shareholders, partners or members of the applicable
Issuer or Partnership/LLC or otherwise and (B) any and all
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rights of conversion, exchange, subscription and any other rights, privileges
or options pertaining to such shares of the Pledged Stock or Partnership/LLC
Interests as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Stock or Partnership/LLC Interests upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of the applicable Issuer or Partnership/LLC, or upon the exercise by
the Pledgor or the Administrative Agent of any right, privilege or option
pertaining to such shares of the Pledged Stock or the Partnership/LLC
Interests, and in connection therewith, the right to deposit and deliver any
and all of the Pledged Stock or the Partnership/LLC Interests with any
committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as it may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to the Pledgor to exercise any such right, privilege
or option and shall not be responsible for any failure to do so or delay in so
doing.
(b) The rights of the Administrative Agent and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the
Administrative Agent or any Lender of any right or remedy against the Pledgor
or against any other Person which may be or become liable in respect of all or
any part of the Obligations or against any collateral security therefor,
guarantee thereof or right of offset with respect thereto. Neither the
Administrative Agent nor any Lender shall be liable for any failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so, nor shall the Administrative Agent be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Pledgor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.
9. Remedies. If an Event of Default shall occur and be
continuing, upon the request of the Required Lenders, the Administrative Agent
shall exercise, on behalf of itself and the Lenders, all rights and remedies
granted in this Pledge Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, and in addition thereto,
all rights and remedies of a secured party under the Code. Without limiting the
generality of the foregoing with regard to the scope of the Administrative
Agent's remedies, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by Applicable Law referred to below) to or upon the
Pledgor, any Issuer, any Partnership/LLC or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or
any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, in the over-the-counter market, at
any exchange, broker's board or office of the Administrative Agent or any
Lender or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Administrative Agent or any
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by Applicable Law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in the Pledgor, which right or equity is hereby waived or
released. The Administrative Agent shall apply any Proceeds from time to time
held by it and the net proceeds of any such collection,
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recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred in respect thereof or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys' fees
and disbursements of counsel thereto, to the payment in whole or in part of the
Obligations, in the order set forth in Section 4.5 of the Credit Agreement, and
only after such application and after the payment by the Administrative Agent
of any other amount required by any provision of Applicable Law, including,
without limitation, Section 9-504(1)(c) of the Code, need the Administrative
Agent account for the surplus, if any, to the Pledgor. To the extent permitted
by Applicable Law, the Pledgor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by Applicable Law, such
notice shall be deemed reasonable and proper if given at least five (5)
Business Days before such sale or other disposition. The Pledgor further waives
and agrees not to assert any rights or privileges which it may acquire under
Section 9-112 of the Code. Nothing in this Section 9 or otherwise in this
Pledge Agreement shall be construed to require the Administrative Agent to give
any notice of an action not otherwise required by Applicable Law and the
express provision of the Pledge Agreement, the Credit Agreement or any other
Loan Document.
10. Private Sales.
(a) The Pledgor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the applicable Issuer
to register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if the applicable Issuer would agree to
do so.
(b) The Pledgor further agrees to use commercially reasonable
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Collateral pursuant to
this Paragraph 10 valid and binding and in compliance with any and all other
Applicable Laws. The Pledgor further agrees that a breach of any of the
covenants contained in this Paragraph 10 will cause irreparable injury to the
Administrative Agent and the Lenders not compensable in damages, that the
Administrative Agent and the Lenders have no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in
this Paragraph 10 shall be specifically enforceable against the Pledgor, and
the Pledgor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred under the Credit Agreement.
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11. Amendments, etc. With Respect to the Obligations. The Pledgor
shall remain obligated hereunder, and the Collateral shall remain subject to
the Lien granted hereby, notwithstanding that, without any reservation of
rights against the Pledgor, and without notice to or further assent by the
Pledgor, any demand for payment of any of the Obligations made by the
Administrative Agent or any Lender may be rescinded by the Administrative Agent
or such Lender, and any of the Obligations continued, and the Obligations, or
the liability of the Pledgor or any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered, or
released by the Administrative Agent or any Lender, and the Credit Agreement,
the Notes, any other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or part, as the Lenders (or the Required Lenders, as the
case may be) may deem advisable from time to time, and any guarantee, right of
offset or other collateral security at any time held by the Administrative
Agent or any Lender for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Administrative Agent nor any
Lender shall have any obligation to protect, secure, perfect or insure any
other Lien at any time held by it as security for the Obligations or any
property subject thereto. The Pledgor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice of
or proof of reliance by the Administrative Agent or any Lender upon this Pledge
Agreement; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred in reliance upon this Pledge
Agreement; and all dealings between the Pledgor, on the one hand, and the
Administrative Agent and the Lenders, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Pledge Agreement. The Pledgor waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon the Pledgor with
respect to the Obligations.
12. Limitation on Duties Regarding Collateral. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account. Neither the Administrative Agent, any Lender nor any of their
respective directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or otherwise.
13. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral constitute irrevocable
powers coupled with an interest.
14. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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15. Paragraph Headings. The paragraph headings used in this
Pledge Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
16. No Waiver; Cumulative Remedies. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to Paragraph 17 hereof) be deemed to have waived any right or remedy hereunder
or to have acquiesced in any Default or Event of Default or in any breach of
any of the terms and conditions hereof. No failure to exercise, nor any delay
in exercising, on the part of the Administrative Agent or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or any Lender
of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which the Administrative Agent or such Lender
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
17. Waivers and Amendments; Successors and Assigns; Governing
Law. None of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Administrative Agent; provided that any consent by the
Administrative Agent to any waiver, amendment, supplement or modification
hereto shall be subject to approval thereof by the Lenders or Required Lenders,
as applicable, in accordance with Section 13.11 of the Credit Agreement. This
Pledge Agreement shall be binding upon the successors and assigns of the
Pledgor and shall inure to the benefit of the Administrative Agent, the Lenders
and their respective successors and assigns. This Pledge Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of North Carolina.
18. Notices. All notices and communications hereunder shall be
given to the addresses and otherwise in accordance with Section 13.1 of the
Credit Agreement.
19. Control Agreement; Acknowledgement by Issuers and
Partnership/LLC. (a) The Pledgor hereby authorizes and instructs each Issuer
and Partnership/LLC to comply, and each Issuer and Partnership LLC hereby
agrees to so comply, with any instruction received thereby from the
Administrative Agent in accordance with the terms of this Pledge Agreement with
respect to the Collateral, without any consent or further instructions from the
Pledgor (or other registered owner), and the Pledgor agrees that such Issuer
and Partnership/LLC shall be fully protected in so complying. Each Issuer and
Partnership/LLC agrees that its agreement set forth in the preceding sentence
shall be sufficient to create in favor of the Administrative Agent, for the
benefit of the Lenders, "control" of the Partnership/LLC Interests within the
meaning of such term under Section 8-106(c) of the Code. (Notwithstanding the
foregoing, nothing in this Pledge Agreement is intended or shall be construed
to mean or imply that the Partnership/LLC Interests constitute "securities"
within the meaning of such term under Section 8-102(a)(15) of the Code or
otherwise to limit or modify the application of Section 8-103(c) of the Code.
Rather, the Administrative Agent has requested that this provision be included
in this Pledge Agreement solely out of an
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abundance of caution in the event the Partnership/LLC Interests are,
nevertheless, deemed to constitute "securities" under the Code.)
(b) Each Issuer and Partnership/LLC acknowledges receipt of a
copy of this Pledge Agreement and agrees to be bound thereby and to comply with
the terms thereof insofar as such terms are applicable to it. Each Issuer and
Partnership/LLC agrees to notify the Administrative Agent promptly in writing
of the occurrence of any of the events described in Section 6(c) of this Pledge
Agreement. Each Issuer and Partnership/LLC further agrees that the terms of
Section 10 of this Pledge Agreement shall apply to it with respect to all
actions that may be required of it under or pursuant to or arising out of
Section 10 of this Pledge Agreement.
20. Authority of Administrative Agent. The Pledgor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Pledge Agreement with respect to any action taken by the Administrative Agent
or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
itself and the Lenders with full and valid authority so to act or refrain from
acting, and neither the Pledgor nor any Issuer or Partnership/LLC shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
21. Consent to Jurisdiction. The Pledgor hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located
in Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of or any dispute in connection with this Pledge Agreement, any
rights or obligations hereunder, or the performance of such rights and
obligations. The Pledgor hereby irrevocably consents to the service of a
summons and complaint and other process in any action, claim or proceeding
brought by the Administrative Agent or any Lender in connection with this
Pledge Agreement, any rights or obligations hereunder, or the performance of
such rights and obligations, on behalf of itself or its property, in the manner
provided in Section 13.1 of the Credit Agreement. Nothing in this Paragraph 21
shall affect the right of the Administrative Agent or any Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right of
the Administrative Agent or any Lender to bring any action or proceeding
against the Pledgor or its properties in the courts of any other jurisdictions.
22. Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Pledge Agreement
or any other Loan Document ("Disputes"), between or among parties to this
Pledge Agreement or any other Loan Document shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by a party
does not waive the right of that party to demand arbitration hereunder.
Disputes may include, without limitation, tort claims, counterclaims, claims
brought as class actions, claims arising from Loan Documents
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executed in the future, or claims concerning any aspect of the past, present or
future relationships arising out of or connected with the Loan Documents.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in Charlotte, North Carolina. The expedited procedures set
forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to
claims of less than $1,000,000. All applicable statutes of limitation shall
apply to any Dispute. A judgment upon the award may be entered in any court
having jurisdiction. Notwithstanding anything foregoing to the contrary, any
arbitration proceeding demanded hereunder shall begin within ninety (90) days
after such demand thereof and shall be concluded within one-hundred and twenty
(120) days after such demand. These time limitations may not be extended unless
a party hereto shows cause for extension and then such extension shall not
exceed a total of sixty (60) days. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest
court of general jurisdiction, state or federal, of the state where the hearing
will be conducted. The parties hereto do not waive any applicable Federal or
state substantive law except as provided herein. Notwithstanding the foregoing,
this paragraph shall not apply to any Hedging Agreement that is a Loan
Document.
(b) Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
ADMINISTRATIVE AGENT, EACH LENDER AND THE PLEDGOR HEREBY IRREVOCABLY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the
preceding binding arbitration provisions, the parties hereto and the other Loan
Documents preserve, without diminution, certain remedies that such Persons may
employ or exercise freely, either alone, in conjunction with or during a
Dispute. Each such Person shall have and hereby reserves the right to proceed
in any court of proper jurisdiction or by self help to exercise or prosecute
the following remedies: (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale granted in
the Loan Documents or under applicable law or by judicial foreclosure and sale,
(ii) all rights of self help including peaceful occupation of property and
collection of rents, set off, and peaceful possession of property, (iii)
obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and in filing
an involuntary bankruptcy proceeding, and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a party in
a Dispute.
23. Entire Agreement; Term of Agreement. This Pledge Agreement,
together with the other Loan Documents, constitutes the entire agreement with
respect to the subject matter hereof and supersedes all prior agreements with
respect to the subject matter hereof. This Pledge Agreement shall remain in
effect from the Closing Date through and including the date upon which
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all Obligations shall have been indefeasibly and irrevocably paid and satisfied
in full and the Commitments terminated.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the undersigned have caused this Pledge Agreement
to be duly executed and delivered as of the date first above written.
[CORPORATE SEAL] RARE HOSPITALITY INTERNATIONAL, INC.
By:
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Name:
------------------------------------
Title:
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[CORPORATE SEAL] BUGABOO CREEK STEAK HOUSE, INC.
By:
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Name:
------------------------------------
Title:
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SCHEDULE I
To Pledge
Agreement
DESCRIPTION OF PLEDGED STOCK
Subsidiaries
=================================================================================================================================
Percentage of
all Outstanding
issued
Issuer Class of Stock Certificate No. No. of Shares Capital Stock
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Bugaboo Creek Steak Common 2 1,000 100%
House, Inc.
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DESCRIPTION OF PARTNERSHIP/LLC INTEREST
Partnerships/LLCs
Partnership/LLC Partnership/LLC Interest
None
